For anyone trying to protect a lifetime of savings while providing for an uncertain future these are probably familiar terms. The notion of needing protection from the impact of a car accident or a fire at home is something most of us learn with the purchase of our first vehicle and house. We tend to become better acquainted with life insurance with marriages, the arrival of children, or estate planning. Over time comes the acknowledgement that sometimes people become sick and need extra care that can rapidly deplete assets, leading to a desire for education on disability and long term care coverages.

Are these the only liabilities that can, or should, be insured against?

The best answer to this question is a resounding – it depends!

Entrepreneurs and business owners know that financial risk comes both from personal circumstance, as in the above examples, and from professional duties. Sometimes insurance is an important part of business financial strategy. A key person policy, insuring the life of a founder or important executive, is oftentimes the best way to manage business continuity in the event someone critical to the business dies unexpectedly. This coverage can allow the surviving spouse or beneficiaries to be bought out, even during times of cash shortfall within the business itself.

What if I don’t own a business? Do I need more than the basics like life, auto, etc?

Unfortunately it’s often not always that simple. Even if your needs don’t extend beyond things like term and permanent life insurance there are special circumstances that require additional planning to manage.

Consider a private individual who has accumulated some valuable artwork, a classic car and a small yacht and intends to leave them to heirs upon death. When included in the value of the estate these treasured items may inadvertently trigger estate tax consequences, forcing the disposal of these family treasures or other assets to cover the tax bill. While estate taxes aren’t a current liability for someone still alive they have a nasty habit of becoming very real at a time when those who pass on can do the least about them, unless proper steps have already been taken.

I am healthy and take good care of myself; do I really need to worry so much?

Those who are healthy and have a family history of longevity face what is commonly known as longevity risk.

It’s counter-intuitive to think that living too long is a risk, but for most of us the reality is that it is entirely possible to outlive our savings. With life expectancies rising and medicine advancing by leaps and bounds this is a particularly pressing concern, even for those with less than healthy habits or genetic history.

Fortunately there are proven methods for insuring against outliving your money. Annuities are known as a common way to provide income for life, but these are provided by a variety of companies and have menus of benefits that aren’t necessarily intuitive or easy to navigate. For this reason the purchase of something as important as an annuity is best managed through a comprehensive insurance plan that provides robust solutions that take into account all both the obvious and less apparent risks in life.